Six provisions of the 2019 NDAA that could impact your wallet

WASHINGTON – Servicemembers will see a rash of changes with the 2019 National Defense Authorization Act that could impact their pocketbooks, especially if companion legislation to fund the newly signed law gains congressional approval in the coming weeks.

Among the most significant changes, servicemembers are slated to get a 2.6 percent pay raise, which would mark the biggest increase in nine years. The increase, which is slated to go into effect Jan. 1, means servicemembers could see a change in their first paycheck of the new year on Jan. 15.

“The biggest thing servicemembers will notice is the pay raise, obviously,” said James F. Naughton, Jr., associate director for government relations for Military Officers Association of America, a nonprofit, national organization. “The increase is due to military pay being tied to private sector wage growth.”

President Donald Trump signed the NDAA into law on Monday, which will direct spending for the fiscal year that starts Oct. 1. The legislation was named for John McCain, the ailing Republican chairman of the Senate Armed Services Committee from Arizona.

The Senate kicked off discussions this week of a spending measure that would fund the pay raises and more personnel concerns for servicemembers.

“At stake is a 2.6 percent pay raise for U.S. servicemembers, the largest pay raise for troops in almost a decade,” Senate Majority Leader Mitch McConnell said Thursday in opening debate from the Senate floor. Also at stake are “the equipment, tools, and training they need to complete their missions. And funding to support the necessary programs we just authorized.”

The Defense Department budget moves on two tracks: the annual NDAA sets policy changes, expenditures for the military and how the money will be spent, while a defense appropriations bill, which is now slated to be part of larger labor, health and human services and education spending bill, is what actually moves money over to the Pentagon to support the plan.

In addition to pay, the legislation directs benefit improvements and personnel reforms. For example, it enhances reforms of the Military Health System and installs the most widespread changes to the Defense Officer Personnel Management Act, or DOPMA, since it was enacted in 1980.

DOPMA, which standardized military promotions across the armed forces, can now become more merit-based and let the services use civilian experience to establish new ranks for entering troops, let officers promote faster and remove expectations of retirement if a servicemember fails to promote twice.

The NDAA will also usher through reforms to reduce child abuse, domestic violence and sexual misconduct among the ranks, such as making domestic violence an offense for the first time under the Uniform Code of Military Justice.

In addition, servicemembers could also see higher basic allowance rates, per diem reimbursements for extended travel, spousal employment improvements, stability for Tricare rates and improvements for military childcare and schools.

Here are six provisions of the 2019 NDAA that could impact your wallet:

Long-term travel per diem rates

Since cost-cutting measures were installed four years ago, active-duty servicemembers and Defense Department workers have seen reduced reimbursement rates for long-term travel that extends beyond 30 days, according to MOAA.

The newly passed NDAA will repeal those per diem decreases.

“In 2014, DOD cut per diem rates on long-term assignments for troops and civilians” while other federal agencies’ per diem rates were not reduced,” Naughton said. “As a result, people were less likely to volunteer for those types of assignments. For DOD employees on a six month assignment, they lost out on $5,400.”

For example, a servicemember traveling between 31 and 180 days saw their per diem rate drop by 25 percent, which amounted to $108 a day. If the travel extended beyond six months, the rate then dropped 45 percent, which amounted to $79 a day.

By comparison, government workers outside of the Defense Department get $144 a day, which added up to the $5,400 gain during a six-month assignment when compared to Defense Department workers and servicemembers traveling for the same amount of time.

Basic housing allowance increases

The 2019 NDAA repeals an annual 1 percent increase in out-of-pocket housing costs for active-duty servicemembers living on base.

For the past four years, the Defense Department had limited the amount of Basic Allowance for Housing, or BAH, funding to military housing providers by at least 1 percent annually. In turn, servicemembers had to pay the difference to these providers under Military Housing Privatization Initiative contracts.

BAH, a stipend provided to active-duty servicmembers living on and off base to cover average housing expenses, can be impacted by duty location, pay grade and dependent status.

“To have to pay out of pocket for any portion of housing is a financial nightmare, especially in active-duty ZIP codes where there is a misalignment between BAH and the housing market,” said R. Kent Morrison, a 16-year Navy veteran who is now founder and president of an Austin-based security company, BSG Security Services. “Even with the pay increase included in the defense spending bill, servicemembers are not making enough money to pay for portions of their housing. The out-of-pocket cost places a tremendous burden on servicemembers and their families, especially while deployed.”

The increase will give on-base housing providers more money to spend on maintenance and property improvements. An important concern since servicemembers have seen deteriorating living conditions at some on-base housing, Morrison said.

“No servicemember expects to live in the lap of luxury, but to ask them to take on monthly housing payments results in additional financial strain and can lead to poor morale, especially among lower-ranking servicemembers,” he said.

Military spousal employment and businesses

This year, lawmakers increasingly heard from military families on the challenges facing spouses hunting for employment, such as high unemployment rates and employers who turn away such workers when they learn they are part of a military family.

Previously, federal agencies could use a special authority to hire military spouses without requiring they compete for the job so long as they had relocated for the military within two years.

The 2019 NDAA will expand that effort on a trial, five-year basis that will let federal agencies hire a military spouse under a so-called “noncompetitive appointments” process even if they haven’t recently relocated for the military.

The NDAA also directs the agencies to collect and report data on military spousal hires.

“I am also pleased by the bill’s enhancements to the career development and employment assistance program for military spouses, who also sacrifice so much for our country,” said Rep. Sanford D. Bishop, Jr, D-Ga., who is co-chairman of the Congressional Military Family Caucus on Capitol Hill.

The new law also requires the Defense Department to conduct an assessment and report on the “feasibility and advisability” of allowing military spouses to engage in small business activities on military bases in partnership with commissaries, exchange stores and other activities under Morale, Welfare and Recreation, a network of military support services. The report is due to Congress by March 2019.

Commissaries, other benefits more accessible to veterans

The NDAA also includes provisions to allow Purple Heart and Medal of Honor recipients, former prisoners of war and veterans with disabilities connected to their military service to shop at the discounted on-base store.

It also extends that access to veteran caregivers.

“If you have the Purple Heart, you should also have access to the commissary. It’s as simple as that,” Sen. Brian Schatz, D-Hawaii, who pushed for the change, said last month as the provision won momentum. “The added bonus to our bill is that it will strengthen the commissary system in the long run, which is good for both active-duty personnel and American taxpayers.”

In addition, the NDAA also expands access to Morale, Welfare and Recreation and Post Exchange privileges to these Purple Heart recipients, service-connected disabled veterans, former POWs, and their caregivers, Naughton said.

“Previously, this benefit was only offered to Medal of Honor recipients and 100-percent disabled veterans,” he said. “The hope is that this added benefit will increase foot traffic and revenue for commissaries, which have seen a consistent decline in sales.”

Tricare fees remain stable

Unlike past years, Tricare, a health care program for military servicemembers, their families and veterans, won’t face any new increases that will impact servicemembers, a key win noted Naughton.

Earlier this year, a MOAA survey found military families are growing more dissatisfied with their Tricare medical insurance. Spouses of enlisted troops using Tricare plans were more likely than all others to cancel or postpone treatment out of cost concerns, according to the survey of 8,500 beneficiaries.

“Another big win for troops is there are no new Tricare fees,” Naughton said. “A Senate proposal would have lumped all Tricare beneficiaries into a new cost-share model, one that would’ve caused military families to pay more in enrollment fees, higher copays, and new non-network deductibles.“

New funding for childcare and military school children

The NDAA will also authorize $40 million in assistance to local schools with high concentrations of military children, Naughton said. Of that, $10 million of that goes to children with special needs, he added.

The law also allows the Secretary of Defense to issue interim security clearances for childcare services on military installations, he said.

“This should help expedite the hiring of childcare workers and make it easier for families to access affordable childcare,” Naughton said.

MOAA also pushed against efforts that would have cut funding to pay for educational savings accounts for military children, which remains intact.

Stars and Stripes reporters Nikki Wentling and Nancy Montgomery contributed to this report